CompoundCalc
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Compound interest calculator

See how a lump sum and monthly contributions snowball over time — load an index-fund preset like the S&P 500, then watch the growth chart update live.

Inputs
£
£
%
Load an index fund

Illustrative long-run averages — not advice, and not a guarantee of future returns.

Future balance
£197,545
You put in
£61,000
Interest earned
£136,545

Growth over 25 years

£0£50k£100k£150k£200k0y4y8y12y16y20y24y25y
Contributions Interest Balance

Investing £1,000 plus £200/mo at 8% for 25 years could grow to £197,545 — £136,545 of it from compound growth.

Time is the engine

Compounding rewards patience — the longest stretch of growth does the heaviest lifting, so the best day to start was years ago, and the next best is today.

Contributions compound too

Every monthly payment starts its own little snowball. Small, steady amounts often beat a big one-off because they keep feeding the machine.

Rate matters — be realistic

A couple of percent changes the outcome enormously over decades. The fund presets are long-run averages; try a cautious rate to stress-test your plan.

Compound interest — your questions

The things people ask most about investing and compound growth.

What is compound interest?
Compound interest is the growth you earn on both your original money and on the growth it has already produced. Because each period's gain joins the pot and earns its own return, the balance snowballs — the effect gets dramatically bigger the longer you leave it, which is why starting early matters so much.
How is the calculation worked out?
The calculator compounds monthly: each month your balance grows by one-twelfth of the annual rate, then your monthly contribution is added. It simulates every month for the full term and plots the balance at the end of each year, split into the money you paid in versus the growth (interest) on top.
What annual return should I use?
It depends on where the money is. As a rough long-run guide, the S&P 500 has averaged around 10% a year nominally, global stock indices around 8%, the FTSE 100 around 7% with dividends, bonds around 3%, and cash savings a few percent. These are nominal averages before inflation — many investors plan with a more cautious 5–7% to stay realistic.
Are index-fund returns guaranteed?
No. The fund presets are illustrative long-run averages, not predictions. Real returns vary year to year, markets can fall as well as rise, and past performance is not a guarantee of future results. Use them as a starting point and try a lower rate to see a more cautious scenario.
Does it account for inflation, fees and tax?
No — the figures are nominal and don't subtract inflation, platform/fund fees or tax. Inflation reduces what your future balance can actually buy, so for 'today's money' you can use a lower real rate (roughly your return minus ~2–3% inflation). In the UK, a Stocks & Shares ISA can shelter growth from tax.
Is a lump sum or monthly investing better?
Both work — this tool lets you combine them. A larger starting lump sum has more time to compound, while regular monthly contributions smooth out the price you pay over time (pound-cost averaging). For most people, investing steadily every month is the simplest, most sustainable approach.
Is this financial advice?
No. This is a free illustration to help you understand how compounding works. It isn't personal financial advice or a recommendation to buy any investment. Always do your own research and consider speaking to a regulated financial adviser for your situation.